Solar Credit OK'd

Massive solar credit OK'd with bailout

San Francisco Business Times - by Lindsay Riddell

The solar industry is elated after Congress passed an eight-year extension to the solar investment tax credit as part of the $700 billion financial industry bailout package.
The president signed the legislation Friday morning. The bill included $128 billion in tax incentives and breaks including the $18 billion solar energy tax credit that offers 30 percent credit to both commercial and residential solar installations. The industry has been pushing for the extension, saying it's needed to scale the industry and drive down the costs of solar to compete with fossil fuel sources.

"What you're going to frankly see now is a tremendous herding of investors who want to get into the marketplace," said Alex Welczeck, CEO of Mill Valley-based Solar Power Partners.

And despite widespread support among both Chamber of Congress, multiple bills extending the tax credits that would have expired at the end of the year, failed to pass because of disputes that included White House veto threats over how to fund them.
The House of Representatives had voted on the legislation seven times in the current legislative cycle, while the Senate had voted on an extension 10 times.

The extension that finally passed in the bailout bill lifted a previous $2,000 cap on residential installations - meaning residential projects will qualify for a 30 percent credit no matter the size of those systems.

Utilities for the first time will also be eligible for the credits, something the utility industry been urging Congress to approve for years.

California will benefit the most from the credit, as it's the largest solar market in the country.

"Deploying solar projects that can provide power on the scale of a public utility, requires a stable investment environment," Robert Fishman, president, CEO and chairman of Palo Alto-based Ausra, which is working to develop utility-scale solar thermal power plants. "The eight-year extension of the tax credit will allow Ausra to continue its leadership in developing innovative technologies to meet our customers' needs and the energy challenges of our future in a clean, reliable, cost-competitive manner."

The eight-year extension is expected to create more than 400,000 jobs nationwide, with 214,000 of those in California alone by 2016.

"It's everything we wanted," said Monique Hanis, spokesperson for the Solar Energy Industries Association in Washington. "It's huge for the industry, it's huge for developing solar in the U.S. market and it's huge in terms of making solar available to every American."

The House voted 263 to 171 to pass financial bailout legislation Friday morning. The Senate had attached the tax relief package to it, and voted in favor of the bailout on Wednesday.

Arno Harris, CEO of San Francisco-based Recurrent Energy, which finances, owns and operates commercial and municipal solar projects, said his company was relieved to see the extension passed even though the entire industry was not convinced it would see an extension this year.

"We're even more relieved to see the economic rescue plan achieve passage," said Harris in an e-mail to the San Francisco Business Times. "Renewable energy projects are highly dependent on a functioning credit market for construction and project financing. The last two weeks were very worrying. Getting a rescue plan in place is key to achieving our country's solar and renewable energy goals."

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